New state board draws interest

Troubled towns ask restructuring panel for financial advice

Rick Karli, Times Union

By Rick Karlin

Published 9:05 pm, Wednesday, October 30, 2013

VIPs and officials, including Mary Wittenberg, New York Road Runners President and CEO, fifth from left, and Thomas Grilk, Executive Director of the Boston Athletic Association, sixth from left, participate in the ceremonial painting of the course line at the finish of the NYC Marathon in New York, Wednesday, Oct. 30, 2013. The yellow color being painted by Grilk is associated with the Boston Marathon and is being included at the NYC Marathon to honor victims and first responders of the 2013 Boston marathon bombings. The NYC Marathon is scheduled to be run on Sunday, Nov. 3, 2013. (AP Photo/Seth Wenig) ORG XMIT: NYSW104

It held its first meeting only a month ago, but the state's new Financial Restructuring Board, created to advise financially troubled cities and towns, is already drawing interest from a few municipalities that want help.

The Restructuring Board is an example of why a top bond rating agency believes that New York state municipalities are in better financial shape than their counterparts in other states.

Cities in states such as California, Michigan and Illinois, for example, have had far more credit downgrades since the eight that have occurred in New York since 2008.

And a combination of strong oversight from the state, reserve funds and a prudent approach to long-term debt means that New York cities and towns are probably less likely than communities in other states to have their credit downgraded, Moody's Investors Service concluded in a recent report.

Moody's analysis, titled "Key Credit Drivers of New York Local Governments," doesn't paint a rosy picture, especially upstate, which it says is in a "long-term economic transformation." That appears to be a euphemism for decline. Upstate towns, Moody's says, are saddled with seemingly unstoppable increases in public employment costs.

But those towns never had the boom in property values that was followed by the 2008 bust.

The rating agency says that forming the Restructuring Board is the latest attempt by the state to provide assistance as well as oversight to localities.

If a local government seeks money from the board, it has to agree to follow its advice.

Some local leaders don't like that idea. Earlier this year, Syracuse Mayor Stephanie Miner publicly criticized Cuomo for the plan, saying that the Restructuring Board doesn't have the power to abrogate costly union contracts or to take other sweeping measures.

It wasn't immediately clear which municipalities can request assistance from the Restructuring Board — officials were reluctant to give names because such a move would still have to be approved by local governing bodies. Additionally, the administrations in some cities will be changing after the November elections.

Peter Baynes, executive director of the state Conference of Mayors, said a handful of towns have expressed interest in working with the Restructuring Board.

"We do have some members planning to go to it," he said.

A state Budget Division official said at least one municipality has filled out an application for assistance. The officials couldn't reveal the name because the municipality still needs to pass a resolution finalizing the request for help.